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Form 1099-S - Proceeds from Real Estate Transactions

IRS Form 1099-S Proceeds From Real Estate Transactions is used to report proceeds from real estate transactions. Where this information is reported depends on the use of the property (personal use, investment use, or business or rental use).

Personal Use

If the 1099-S was for the sale of your main home, complete the Sale of Home questions under the Investment Income topic in our program to see if any amounts are taxable. For additional information see the IRS Instructions for Form 1099-S.

From within your TaxAct® return (Online or Desktop) click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal.

Click Investment Income to expand the category and then click Gain or loss on sale of investments

Click Sale of your main home

The program will proceed with the interview questions for you to enter or review the appropriate information

Be sure to check the box that you received a Form 1099-S so the transaction is transferred to the applicable forms/schedules within your return.

If you incurred a loss on the sale of your main home, you are not allowed to deduct this loss since it is personal use property. If you marked the checkbox Check here if you received a Form 1099-S, the sale of home transaction will be reported on Form 8949 and Schedule D. The TaxAct program will automatically adjust the loss to zero using Adjustment Code L.

Per the IRS Schedule D instructions, do not report the sale of your main home on your tax return unless your gain exceeds your exclusion amount. Refer to IRS Publication 523Selling Your Home for information on the sale of your home, the ownership and use tests, and the exclusion amount.

If the 1099-S was for a timeshare or vacation home, then it would be considered a personal capital asset to you and the sale would be reportable on Federal Form 8949 and Schedule D. A gain on this sale is reportable income. If you incurred a loss on the sale you are not allowed to deduct this loss since it is personal use property. The same would be true for inherited property if it is a personal capital asset. You would need to select Adjustment Code L so the loss is disallowed on the return.

Note that if the inherited property would be considered investment property, then the capital gain or loss would be reported on Form 8949 and Schedule D and the loss would be allowed. For those instructions, see Investment Use below.

To report proceeds for property considered to be a personal capital asset:

From within your TaxAct return (Online or Desktop) click on the Federaltab. On smaller devices, click in the upper left-hand corner, then select Federal.

Click Investment Income to expand the category and then click Gain or loss on sale of investments

Click on Capital Gain or Loss (Form 1099-B)

Click Add to create a new copy of the form or click Review to review a form already created

The program will proceed with the interview questions for you to enter or review the appropriate information

Generally, your basis in property you inherited from a decedent is the fair market value at the date of the individual's death. However, you should refer to IRS Publication 551Basis of Assets for further information.

Investment Use

If the 1099-S was for investment property (or, as mentioned above, inherited property that is considered investment property), the sale would be reportable on federal Schedule D:

From within your TaxAct return (Online or Desktop) click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal.

Click Investment Income to expand the category and then click Gain or loss on sale of investments

Click Capital Gain or Loss (Form 1099-B)

Click Add to create a new copy of the form or click Review to review a form already created

The program will proceed with the interview questions for you to enter or review the appropriate information

Business or Rental Use

If the 1099-S was for the sale of business or rental property, then this is reportable on IRS Form 4797 and Schedule D:

From within your TaxAct return (Online or Desktop) click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal.

Click Business income to expand the category and then click Business income or loss from a sole proprietorship or Rent and Royalty Income depending on the type of business owned the disposed asset

The program will proceed with the interview questions for you to enter or review the appropriate information